Thursday, May 30, 2024

Louisiana officials say COVID-19 pandemic could create economic opportunities

by BIZ Magazine

By David Jacobs | The Center Square

The COVID-19 pandemic has shined a spotlight on how much of the nation’s supply chain is based overseas. If corporations start to rethink those decisions, Louisiana should be ready to compete for those investments, business and elected leaders said Thursday.

“There are going to be legion opportunities for Louisiana coming through this coronavirus crisis,” said Michael Hecht, president of Greater New Orleans Inc., a regional economic development organization. “A lot of it is going to have to do with operations that were overseas shifting back here to the U.S.”

Manufacturing may come back from China, speakers suggested, noting that Chinese officials have been accused of essentially commandeering a 3M plant that makes protective masks. The pandemic also highlights how much medicine manufacturing happens overseas, which could be seen as a national risk, Hecht said. Technology firms currently outsourcing work to India may bring some of that work stateside to take advantage of better infrastructure to work from home, he said.

Hecht said taking advantage of the opportunity partly involves aggressive marketing. He suggested existing incentives, such as the Quality Jobs rebate program, could be repackaged “into some type of ‘come home to Louisiana’-type program.”

Louisiana already is one of the leading states for foreign direct investment per capita, he said.

“We’ve shown that we can do it,” Hecht said. “This is just a re-focusing of that effort.”

Louisiana companies potentially could help to meet the demand for personal protective equipment, said U.S. Rep. Steve Scalise, a Republican from suburban New Orleans. About 90 percent of the agents for pharmaceutical products sold in the United States are made in China, he added.

Scalise urged business leaders and lawmakers to consider ways for Louisiana businesses to fill those needs.

“You’re going to see a lot of interest at the federal level to make that happen,” he said.

Scalise and Hecht spoke Thursday during a meeting of the Louisiana Economic Recovery Task Force, which the Legislature created to address the economic fallout of the COVID-19 pandemic.

Scalise said members of Congress are working with the U.S. Treasury in hopes of making the Paycheck Protection Program more flexible. The program was intended in part to help companies retain their workers, but it is less helpful in industries that still are unable to fully reopen, some business owners say.

Louisiana Gov. John Bel Edwards’ administration is considering loosening some of the current restrictions on businesses and moving into “phase one” of the White House-approved reopening process. Some states such as Texas and Florida that have entered phase one are letting restaurants resume indoor dining, which still is banned in Louisiana, but limiting seating to 25 percent of normal capacity.

Scalise called 25 percent a “random number” that doesn’t work for many businesses. Stan Harris, president and CEO of the Louisiana Restaurant Association, agreed.

“Social distancing is the key with this,” Harris said, referring to the practice of maintaining at least six feet of space between yourself and others who are not part of your household. “Twenty-five percent for a couple of weeks is a stretch for a business. But if it is indefinite, it’s a death knell. It’s just going to bring them closer to closing permanently.”

State Rep. Jerome Zeringue and State Sen. Bodi White, who chair the main spending committees of their respective bodies, also participated in the meeting. Zeringue said lawmakers might need to reduce spending by between $500 million and $1.5 billion to balance next year’s budget.

The Revenue Estimating Conference plans to meet Monday to begin trying to figure out how much money lawmakers will have to spend.

“More than likely, a special session will be required,” Zeringue said.

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